Setting up an offshore company in Panamá is a fairly simple affair, made easy by the uniquely lucid and straightforward Corporation Law 32 established in 1927. This law has led to the formation of more than 400,000 corporations and foundations in Panamá, making it second only to Hong Kong as a major jurisdiction for incorporation.
Panamá offshore company is known as a Panamá corporation, and in its most secure form offers bearer shares to provide privacy and anonymity to your business transactions. It is similar to an International Business Company or IBC, but is not prohibited from conducting business within Panamá as IBCs are in other offshore jurisdictions. The corporation’s business activities outside Panamá, however, are not taxed within Panamá.
It takes just two people to form the corporation in Panamá; they can be of any nationality, and residents of any country in the world. These two people must present and sign the articles of incorporation before a Notary Public in Panamá.
Conveniently, you do not need to travel to Panamá personally to establish the corporation; our law firm, as the Registered Agent for the corporation, can handle the filing of the documentation on your behalf.
The articles of incorporation cover all the information needed to set up the corporation. They can be executed anywhere in the world, in any language; those performed abroad must be translated and authenticated by a Panamanian consul.
This is a general outline of the articles of incorporation needed to register your offshore company in Panamá:
- Name of the corporation: The name can be in any language, but must be unique in Panamá and contain an abbreviation, word or phrase indicating its nature as a corporation (such as Corp., Sociedad Anonima, S.A.).
- Board of Directors: A minimum of three directors are needed to form the Board of Directors, which generally has full control over the corporation. The names and addresses of residence of each director must be provided. You may appoint your own directors, or we can provide nominee directors for added anonymity. In the latter case, additional by-laws can explicitly grant control over the company to the stockholders. If the stock is issued in bearer form, this places the control is in the hands of the person holding the physical shares, giving you complete flexibility and control in determining who has power over the corporation.
- Officers: A President, Treasurer and Secretary of the corporation are required. These can be all the same person, if desired. There are no restrictions as to who can serve as officer, beyond being of majority age (over 18). They can be natural persons or juridical entities (such as another corporation) from any country in the world. Additional officers such as Vice-Presidents, managers can be named, and the directors of the company can also serve as officers if desired.
- Purpose(s) of the corporation: Corporation’s purpose must be stated at the time of incorporation. The purpose(s) can be as general or as detailed as you wish to make it, but some activities, such as banking or insurance, must be stated explicitly.
- Duration: The corporation can be created as a limited entity, having a finite term and a set date of dissolution, or unlimited with an indefinite life span, as suits your personal needs.
- Capital: no minimum capital is required to form a Panamá corporation, however an initial capital of more than $10,000 will increase the registration fee, so it is generally recommended to keep the Authorized Capital, as it is known, to less than $10,000. There is no time limit in which authorized capital must be fully paid.
- Shares: Shares can be issued in nominative (named) or bearer (anonymous) form, and can be structured in a variety of ways (voting, non-voting, preferred, etc.), all of which are listed publicly as part of the articles of incorporation.
- Domicile: The residence of the corporation can be anywhere in the world, but the Panamánian corporate tax shelter only applies to corporations domiciled in Panamá.
- Registered Agent: A lawyer or law firm in Panamá is needed to represent the corporation as its registered agent.
- Additional By-Laws: Any number of additional clauses regarding the corporation’s structure and governance can be included in the articles of incorporation
- Annual fees: Panamá corporations are subject to an annual corporate franchise tax of $250, payable upon registration and then annually. The due date of the annual payment is June 30 for companies formed between January 1st and June 30th, and December 31st for companies formed between July 1st and December 31st.
In total, the process should take no more than a week, provided all the necessary documentation is in order. If the corporation is to be formed in your absence, documents such as passport copies and reference letters will need to be notarized and apostilled, in order to be accepted at the Panamá Registry.